RealNetworks (RNWK)

 

Our operating results could be adversely impacted by the loss of subscription revenue, including the revenue generated from the online music services offered by our Rhapsody America joint venture. Internet subscription businesses are a relatively new media delivery model, and we cannot predict with accuracy our long-term ability to maintain or increase subscription revenue. Subscribers may cancel their subscriptions to our services for many reasons, including a perception that they do not use the services sufficiently or that the service does not provide enough value, a lack of attractive or exclusive content generally or as compared with competitive service offerings (including Internet piracy), or because customer service issues are not satisfactorily resolved. In recent periods, we have seen an increase in the number of gross customer cancellations of our subscription services due in part to an increasingly large subscriber base, an increase in involuntary credit card cancellations resulting in termination of service and increased prevalence and awareness of alternative “free” on-demand streaming music services. In addition, we must continue to obtain compelling digital media content for our video, music, and games services in order to maintain and increase usage and overall customer satisfaction for these products. Our online music service offerings available through our Rhapsody America venture depend on music licenses from the major music labels and publishers, and the failure to renew these licenses under terms that are commercially reasonable and acceptable to us would harm Rhapsody America’s ability to generate revenues from its subscription services.

 

Our operating results could be adversely impacted by the loss of subscription revenue. Internet subscription businesses are a relatively new media delivery model and we cannot predict with accuracy our long-term ability to maintain or increase subscription revenue. Subscribers may cancel their subscriptions to our services for many reasons, including a perception that they do not use the services sufficiently or that the service does not provide enough value, a lack of attractive or exclusive content generally or as compared to competitive service offerings (including Internet piracy), or because customer service issues are not satisfactorily resolved. In recent periods, we have seen an increase in the number of gross customer cancellations of our subscription services due in part to an increasingly large subscriber base. As our subscription business evolves, we have increased our focus on “free-to-consumer” products and services. In addition, certain subscription based products and services with mobile carriers and broadband service providers are sold on a flat-fee or revenue-share basis. It is not clear what the long-term impact of this evolution will have on our subscription revenue.

 

 

Our operating results could be adversely impacted by the loss of
subscription revenue. Internet subscription businesses are a
relatively new media delivery model and we cannot predict with
accuracy our long-term ability to maintain or increase
subscription revenue. Subscribers may cancel their subscriptions
to our services for many reasons, including a perception that
they do not use the services sufficiently or that the service
does not provide enough value, a lack of attractive or exclusive
content generally or as compared to competitive service
offerings (including Internet piracy), or because customer
service issues are not satisfactorily resolved. In recent
periods, we have seen an increase in the number of gross
customer cancellations of our subscription services due in part
to an increasingly large subscriber base. As our subscription
business evolves, we have increased our focus on
“free-to-consumer”
products and services. In addition, certain subscription based
products and services with mobile carriers and broadband service
providers are sold on a flat-fee or revenue-share basis. It is
not clear what the long-term impact of this evolution will have
on our subscription revenue.